2017 March Board Book

CALIFORNIA MILK ADVISORY BOARD

Board of Directors Meeting March 1-2, 2017

PUBLIC BUSINESSMEETINGAND CLOSED SESSION (As Provided by Section l l 126(a&q), Article 9 ofthe Government Code) RealCalifomiaMilk.com

CALIFORNIAMILK PRODUCERS ADVISORY BOARD

CMAB Mission Statement: "We represent the commitment by all California dairy families to help increase demand for dairy products made from California milk."

Board of Directors Meeting

Wednesday, March 1, 2017 Thursday, March 2, 2017

7:30 a.m. -5 p.m. 8 a.m. -12 noon

DoubleTree Hotel 1150 9 th Street Modesto, California

Agenda

1. Call to Order, Flag Salute, and Invocation - Chairman Dante Migliazzo 2. Roll Call - Secretary JeffWilbur 3. Introduction ofGuests- Chairman Migliazzo 4. Closed Session A. Pending and/or ongoing litigation (pursuant to California Government Code 1126(e) B. Appointment, employment, evaluation of performance, or dismissal ofan employee (pursuant to California Government Code 11126(a) C. Executive Session 5. Reconvene Open Session 6. Minutes of Last Board and Executive Committee Meetings - Secretary Wilbur A. Public comments on agenda items 7. Financial Report- Treasurer Jim Ahlem 8. Individual District Reports 9. Marketing Branch Report 10. Report from Chairman 11. Election ofBoard Officers and Executive Committee 12. Report from Chief Executive Officer-John Talbot 13. Program Review and Proposals A. Advertising B. Communications C. Business Development

D. Processor Relations E. Producer Relations

14. Breakout Sessions: Advertising, Communications, Business Development

Guest Speakers -Kurt Vanderah-DMI-Community Manager-Dairy Hub - Joe Pawlak & Katie Cameron - Technomics

15.

Committee/Industry Meetings Update

16. 17. 18.

National Dairy Board Update

Other Business A. Previously discussed or tabled agenda items for approval B. Discussion ofongoing board activities C. Items to be discussed at next board meeting D. Public comments on non-agenda items (two minutesper person will be allowed) 19. Closed Session A. Pending and/or ongoing litigation (pursuant to California Government Code 1126(e) B. Appointment, employment, evaluation of performance, or dismissal ofan employee (pursuant to California Government Code l1126(a) C. Executive Session 20. Reconvene Open Session 21. Adjournment

Each ofthe agenda items above will include discussion and possible action by the Board. All meetings ofthe California Milk Producers AdvisoryBoardare open to the public and are subject to the Bagley-Keene Open Meeting Act. Time will be allowedfor members ofthe public to make comments on each agenda item. This will be limited to two minutes per person under the agenda item 'Other Business'. Persons with disabilities needing special accommodation should contact the Board at leastfive days prior to the meeting. This agenda is available on the California Department ofFood and Agriculture's website at Mn11.cd!i.1.ca.gov 111/..t ' mkrlm e e t mg .h tm l . Forfurther information regarding the agenda/or this meeting, please contact John Talbot, C.E.O., California MilkAdvisoryBoard at 209-883-6455.

SECTIONS 11120 THROUGH 11132 OF THE CALIFORNIA GOVERNMENT CODE

Objective of the Act

When the Legislature enacted the Bagley-Keene Open Meeting Act (Act), it imposed a "value judgment" on the Governmental process. In effect, the Legislature said that when a State body sits down to develop its consensus, there needs to be a seat at the table reserved for the public. By reserving this place for the public, the Legislature provided the public with the ability to monitor and participate in the decision-making process. If the State body were permitted to meet in secret, the public's role in the decision-making process would be negated. Therefore, absent a specific reason to keep the public out of the meeting the public should be allowed to monitor and participate in the decision-making process. If one accepts the philosophy behind the reservation of a seat at the table for the public, many of the particular rules that exist in the Act become much easier to accept and understand. Simply put, some efficiency is sacrificed for the benefits of greater public participation in aovernment. A State body is a body consisting of two or more people and includes advisory boards, councils and commissions. Committees appointed by a State body are also considered State bodies if they consist ofmore than two members. A meeting occurs when a quorum of a body convenes, either serially (not permitted) or together in one place to address issues under the body's jurisdiction. This includes meetings solely for the purpose of presenting information to a body. Even if no actions or decisions are contemplated, a gathering of a quorum of a body to discuss issues under the body's jurisdiction is considered a meeting under the Act. Serial Meetings occur when a member or staff of a State body communicates by telephone or email individually with a sufficient number of other members to constitute a quorum in order to discuss issues to come before the body. Such serial communications are prohibited by the Act. Social gatherings of a State body are not considered meetings covered by the Act so long as official business is not discussed. Conference calls are permitted under the Act provided that the physical locations of each participant are included on the meeting notice and that each location is accessible to the public. A Meeting Notice must be published at least ten (10) days prior to the date of the meeting. To avoid issues, issue notice 11 days before meeting at the latest. Meeting Notice must be mailed to anyone requesting a copy and must be posted on the Board's website. The Meeting Notice must also be posted on CDFA's website.

I

I

I

i

What is a State Body?

What Constitutes a Meeting?

What are Serial Meetings?

I

Social Gatherings

I

I

Teleconference Calls

Regular Meeting Notice Requirements

Required Posting

Special Meetings

In order to provide State bodies with a means ofholding a meeting on short notice because of the occurrence of an unforeseen event, the Act allows for "Special Meetings" with a 48-hour notice with copies to all national wire services. The purposes for which a body can call a special meeting are quite limited. Examples include pending litigation, legislation and certain personnel actions. Meeting notice must include: • Date, time and place meeting is to be held • A specific agenda for the meeting • If there will be a Closed Session, must be on the agenda and must cite Code Section and Subsection providing legal authority for Close Session. • Notice that any agenda item will be discussed and that board action may occur on any agenda item. • Must list a contact person for questions concerning the agenda or for needed special accommodations. • See example attached. The Agenda should allow opportunity for public comment on each agenda item. Members of the Public should also have opportunity to offer comments on subjects not listed on the agenda (reasonable time limits can be applied) In most cases, there are only two authorized reasons for Closed Sessions for our programs: • Personnel Issues • Pending Litigation - Attorney should be present with ··· ············-············ ____ memo ___ p re p ared _ for _ the __ board __ of _ directors. ··-·······-·-·-·-----·-----·--·· ---·-·-····-·-·-·-·-···· • Chair must announce in open session that the Board is entering into closed session and state the purpose of the closed session • Only board members and people necessary to conduct the business of the closed session should be present • When closed session adjourns, open session must be reconvened and the nature of any actions taken in closed session must reported • Minutes of the closed session must be prepared and kept in confidential file - ··-·--·-·-·-·- - -·- ·-· ··-·--"··- .. ··-·- ··-·--·-·- --------

Notice Content

Comments from Public

Closed Sessions

,- --~ .. ·--

Closed Session Process

Rights of the Public:

• To attend meetings free from conditions • To tape, record or broadcast meetings • To comment on any agenda item (may post a time limit) • To make comments regarding non-agenda items (may impose time limit) • To have access to documents provided to board members • To receive notice to all meetings of the board or its committees including agenda • Assurance that the meeting will not begin before the time stated on the notice

California MilkAdvisory Board 2316 Orchard Parkway, Suite 200 Tracy, CA 95377 Telephone: 209-883-6455

I. Required C ontinuation H e aring - A public hearing must be held every five years to consider the CMAB's continuation. The last continuation hearing was August 19, 2015. The next required continuation hearing will likely occur in the summer of 2020.

Fiscal Year - January 1 to December 31

II.

III . Board Composition -24 producer members, 24 alternates, and 24 reserve alternates [Public Member is permissive.] There cannot be more than 1 vote from any one dairy production entity. Board seats are allocated in accordance with each district's production and number of producers. The allocation of seats is reviewed every three years.

Board Terms of Office - March 1 st through February 28th The terms are for 3 years and are staggered so that one-third of seats must be filled each year.

I V .

V . Term Limits - No member or alternate may serve more than four consecutive three-year terms in the same position.

V I . Vaca n cies -Alternate serves in the stead of vacant position and reserve alternate in the stead of the alternate. Vacancy is not filled until the next annual nomination meeting.

Quorum and Board Procedures -

V II .

A quorum is 13 members.

• Board actions that do not regard expenditures of program funds and do not regard selection or dismissal of management personnel require an affirmative vote of a majority of the total members of the board. (13 votes) • Board actions related to expenditure of funds for any program requires a % vote of the voting members present, or 13 votes , whichever is e reater . • Board actions related to selection or dismissal of management personnel require a½ vote of the full board. (16 votes) [17 votes if there is a public member appointed.]

V III . MaximumAssessment - Either 10 cents per hundredweight or 1% of Gross Dollar Value

Authoriz e d Activitie s :

I X.

A. Research Authority -Relating to market milk and dairy products, research studies concerning health, food, nutritional, therapeutic, dietetic or such qualities of other food products, for the development of new food products, or for the development of new uses for milk or dairy products.

Over

B . Education Authority - Programs may include programs designed to acquaint producers, Producer-Handlers, or other interested persons with quality improvement, including sanitation practices, procedures, or methods as applied to suchmarket milk or dairy products, and may also include educational programs designed to make available to producers, producer-handlers, handlers, and the public generally the findings of research programs.

C . Advertising and Sa l es Promotion and Market Development Authority :

• Milk and Dairy Products Other than Cheese , Ice Cream and Butter - The Board may develop programs of advertising and trade promotion relating to market milk and dairy products, provid e d , that any such plans, with the exception of plans that make incidental references to brands of cheese, ice cream, or butter as described below, shall be directed toward increasing the sale ofsuch milk and dairy products without reference to any private brand or trade name used by any handler or producer-handler ofmilk or dairy products. • Cheese, Ice Cream and Butter - The Board may develop advertising and sales promotion plans to allocate funds for promotions of cheese, ice cream, or butter products made with California milk, including promotions in which brand or trade names are used; provided , that the use is incidental to the promotion of the California milk product and not in direct promotion of the brand or trade name; and providedfurther , that the allocation of funds is made available on a nondiscriminatory basis to all retailers and manufacturers of butter, ice cream, or cheese utilizing milk produced in California. Permissible private brand or trade name marketing promotions may include advertising, performance allowances, sales promotions, couponing subject to Section 61375 and in-store promotion programs and materials, and other marketing communication tools • Official Board Brands, Trade Names, Labels and Other Distinctive Designations - The Board is authorized to establish and to regulate the permissive use of official Board brands, trade names and labels, and other distinctive designations of grade, quality or condition, except the grade or quality designations in effect pursuant to State or Federal grade standards, for anyproduct in which market milk or other dairy products are used. Any official Board brand or trade name which is established pursuant to this section shall not be construed as a private brand or trade name with respect to Section 58889 of the Code.

CMAB Glossary of Terms

ACV (All commodity volume) -- Total grocery dollars attributed to individual retail groups in a defined geographic trade area.

Advertising awareness -- One diagnostic tool that companies use to gauge the success of a campaign, advertising awareness studies measure whether or not consumers have knowledge of the ad or recall seeing it.

Advertorial -- An advertisement in a print publication designed to look like a news or feature article.

Brand -- A name or symbol that identifies a company's product as distinct from those of its competitors. A well-developed brand communicates a promise to the consumer about a product's unique benefits.

Broker -- An agent who is authorized to buy or sell products for another organization. Brokers facilitate the movement of dairy products from processors to retail stores.

California Dairy Quality Assurance Program (CDQA) -- An educational program collaboratively offered by the California dairy industry, state and federal regulatory agencies, and the University of California. Its goal is to encourage, through education and voluntary certification, science-based dairying practices which promote the health of the consumer, the environment and dairy livestock. California Dairy Research Foundation (CORF) -- The mission of the CDRF is to increase the utilization ofmilk through investments in research. The scope of this research includes dairy foods, dairy herd health and food safety, nutrition and dairy quality assurance. California Department of Food & Agriculture (CDFA) -- The CDFA promotes and fosters confidence in California agriculture by implementing and communicating public policy and programs. The CDFA interfaces with the dairy industry in a variety of areas including exports, promotion and research marketing orders, producer milk pricing, pooling and distribution of milk revenue, quality and sanitation, and animal health.

Cable TV -- Television service purchased by consumers that is carried to homes by direct wires (cables).

Centralized Buying -- Under a centralized buying system, the responsibility for product selection and purchase is consolidated in a central market office, rather than with the individual stores.

CALIFORNIA MILK ADVISORY BOARD

Budget VS Actual For Calendar Year January 1, 2016 through December 31, 2016

INCOME

Budget

Budget

Budget

%

Revenue

Balance

Revised

Revisions

Original

INCOME SOURCE

ASSESSMENTS TRANS. FROM QUALIFIED PROGRAMS NON-ASSESSMENT INCOME REQUIRED RESERVE CARRYOVER CASH BALANCE CARRYOVER

100

$83,196.72

$41,083,196.72

$41,000,000.00

$0.00 $0.00 $0.00 $0.00 $0.00

$41,000,000.00

0

$0.00

$0.00

$0.00

$0.00

182 100

$245,064.71

$545,064.71 $500,000.00 $6,450,871.50

$300,000.00 $500,000.00 $9,500,000.00

$300,000.00 $500,000.00 $9,500,000.00

$0.00

68

($3,049,128.5Q)

95

($2,720,867.07)

$48,579,132.93

$51,300,000.00

$0.00

$51,300,000.00

EXPENDITURES

Budget

Budget

Budget

%

Balance

Expenditures

Revised

Revisions

Original

ADVERTISING, PROMOTION AND RESEARCH PROGRAMS ADVERTISING

94 91 91

$1,262,303.96 $793,155.72 $130,534.69 ($50,000.00) $107,408.88 $420,555.33 $1,042,293.38 $86,389.74

$19,237,696.04 $8,026,844.28 $1,249,465.31 $2,502,974.00 $213,610.26 $641,591.12 $3,554,444.67 $4,538,231.62 $235,392.10 $430,440.20 $1,040,109.32 $1,123,356.63

$20,500,000.00 $8,820,000.00 $1,380,000.00 $2,452,974.00 $300,000.00 $749,000.00 $3,975,000.00 $5,580,525.00 $335,000.00 $500,000.00 $1,220,000.00 $1,851,000.00

$20,500,000.00 $8,820,000.00 $1,380,000.00 $2,452,974.00 $300,000.00 $749,000.00 $3,975,000.00 $5,580,525.00 $335,000.00 $500,000.00 $1,220,000.00 $1,851,000.00

$0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

MARKET ENHANCEMENT

FOODSERVICE

CA DAIRY RESEARCH FOUNDATION

102

EDUCATION & COMMUNITY RELATIONS

71 86 89

PRODUCER RELATIONS

COMMUNICATIONS

81

INTERNATIONAL INITIATIVE PROCESSOR RELATIONS

70

$99,607.90

INDUSTRY INTELLIGENCE

86

$69,559.80

$0.00

TRADESHOWS

85

$179,890.68 $727,643.37

$0.00 $0.00

KIDS MILK MARKETING & RESEARCH

61

90

$4,869,343.45

$47,663,499.00

$42,794,155.55

$47,663,499.00

$0.00

OFFICE OPERATIONS

OFFICE OPERATIONAL

100 106 100

$57.05

$299,942.95 $248,778.14 $44,944.33 $34,996.03 $37,071.17

$300,000.00 $235,500.00

$0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

$300,000.00 $235,500.00

RENT EXPENSE

($13,278.14)

TRAVEL & AUTOMOBILE

$55.67

$45,000.00

$45,000.00

LEGAL EXPENSE

35 82

$65,003.97

$100,000.00 $45,000.00 $40,000.00 $65,000.00 $40,000.00

$100,000.00

FREIGHT & POSTAGE

$7,928.83

$45,000.00

AUTOMOBILE PURCHASES

0

$0.00

$40,000.00

$40,000.00

CLERICAL AND OFFICE EQUIPMENT

99 94

$527.71

$64,472.29 $37,632.00

$65,000.00 $40,000.00

LIABILITY INSURANCE

$2,368.00

88

$102,663.09

$767,836.91

$870,500.00

$870,500.00

$0.00

ADMINISTRATIVE WAGES & BENEFITS EMPLOYEE INSURANCE

69

$42,349.14 $10,424.66 $200,000.00 $123,364.35

$92,650.86 $29,575.34

$135,000.00

$135,000.00

$0.00 $0.00 $0.00 $0.00

MONEY INVESTMENT PLAN

74

$40,000.00

$40,000.00

RETIREMENT PLAN SALARIES & WAGES

0

$0.00

$200,000.00 $735,000.00

$200,000.00 $735,000.00

83

$611,635.65

66

$376,138.15

$733,861.85

$1,110,000.00

$1,110,000.00

$0.00

STATE OF CA. DEPARTMENTAL CHARGES MARKETING BRANCH

73

$30,097.89

$79,902.11 $30,000.00

$110,000.00

$110,000.00

$0.00 $0.00 $0.00

COMPLIANCE & FISCAL AUDIT MILK MARKET ENFORCEMENT

75 67

$10,000.00

$40,000.00

$40,000.00

$2,500.00

$5,000.00

$7,500.00

$7,500.00

73

$42,597.89

$114,902.11

$157,500.00

$157,500.00

$0.00

BOARD MEETING EXPENSES

98

TRAVEL EXPENSES MEETING EXPENSES

$1,393.64 ($538.52) $7,412.34

$83,606.36

$85,000.00

$85,000.00

$0.00 $0.00 $0.00

101

$100,538.52

$100,000.00

$100,000.00

84

PER DIEM BOARD

$37,587.66

$45,000.00

$45,000.00

96

$8,267.46

$221,732.54

$230,000.00

$230,000.00

$0.00

TOTALS

78

TOTAL ADMINISTRATION & OPERATIONS

$529,666.59

$1,838,333.41

$2,368,000.00

$2,368,000.00

$0.00

89

TOTAL EXPENDITURES

$5,399,010.04

$44,632,488.96

$50,031,499.00

$0.00

$50,031,499.00

0

REQUIRED RESERVE

$1,268,501.00

$0.00

$1,268,501.00

$1,268,501.00

$0.00

89

TOTAL EXPENDITURES & REQUIRED RESERVE

$6,667,511.04

$44,632,488.96

$51,300,000.00

$0.00

$51,300,000.00

$2,760,000.00

PAYROLL BALANCE

ADMINISTRATIVE AND PROGRAM PAYROLL

$2,753.47

ADVERTISING Presentation to the Board of Directors March 2017

Page Number

CMAB Advertising Update

1

National Television: National TV is a key driver of awareness of the seals, which continues to be positive. Our campaign, Return to Real, launched in August 2015 and featured four TV commercials that ran throughout the end of 2016. For 2017, we’ve carried through the Return to Real message with four new TV spots that will run throughout the year and also live on YouTube and RCM.com. The new work is similar to last year, but has more emphasis on relatable, human moments and also features four new farm families. The first two spots launched on January 2. The first spot, titled “Bribe,” features a child who has grown bored while working on his science project, but Mom offers him a delicious yogurt parfait as incentive to successfully finish his work. And the second spot, titled “Respect the Tortilla,” pays homage to three varieties of Hispanic cheeses that are used to make a mouthwatering enchilada dish. The other two spots, “Dad’s Pancakes” (Butter) and “Artisanal” (Ice Cream), will also mix in throughout the year.

1

2017 National TV Plan:

2017 Creative Campaign: In addition to the four new Return to Real TV spots airing in 2017, we will be continuing our “always on” social and search efforts. We will be looking for new ways to tell our real food story as well as continuing to provide a unique look at the farmers who make up CMAB. In 2017 we want to continue to give meaning to the seal and all it stands for. Some of the content from 2016, including the “Growing Up Dairy” videos and Tastemade videos, will continue to run in the first half of the new year. We will be taking a closer look at new media partnerships and content series as the year progresses. RealCaliforniaMilk.com: Throughout 2016 we made regular content updates to the site to feature the latest and greatest news and highlight our latest content. We integrated video content into the recipe section of the site and started to do a major overhaul on the Foodservice section. In 2017 we will continue to make regular content updates. We launched the finished revamped Foodservice site in February and will monitor site behavior closely. As consumers continue to engage with our content on our social channels and as our paid search efforts and digital media continue to drive traffic to the site, it’s important that we continue to make regular content updates to the site and create a welcome environment that gives meaning to the Real California Milk seal.

2

Website Traffic: In the second half of 2016 we saw web traffic jump to levels comparable with past years. We are continuing our “always on” approach for search and social in 2017. It’s important to note that in 2016 we shifted our content strategy and instead of focusing on growing visitors to the site, we decided to aim for higher engagement across channels where our content appears. We were able to maintain a solid share of visitors as compared to past years, but where we really saw success was engagement on social as well as the equity earned through our digital partnerships. In 2017, we will continue to monitor interaction and engagement across all social channels and through our digital partnerships to ensure we are getting solid engagement with Real California Milk across all channels.

Unique Visitors By Month

250,000

200,000

150,000

2014

2015

100,000

2016

50,000

0

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

YEAR

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

YTD

2014

42,266 38,373 44,075 39,060 35,926 74,985 130,301 50,497

97,077

88,089

118,646 126,997 759,295

2015

42,384

41,490

55,251

40,229

37,829

36,349

35,992

81,890 144,966 157,645 172,661 214,202 846,686

2016

10,599

8,192

9,754

17,456

28,350

53,592

51,352

148,482 111,860 183,747 155,249 91,798 778,633

3

Online Advertising, Digital Partnerships and Apps:

In 2016, we looked for ways to utilize digital media to bring the Return to Real campaign to life. The two main elements in our positioning platform, “Real Food” and “From Real People,” are fueling endless opportunities to connect consumers with our recipes and usage ideas, our nutrition information, our farmer stories and our unique California distinctiveness. Digital media has proven extremely effective and measurable in delivering our TV spots and other video content online in a way that consumers can engage with, including click-through from ads to deeper stories on our website or to video content on YouTube. Our overall plan delivered over 300 million women 25-54 targeted impressions, and almost 80 million completed video views at an efficient $.03 per view. One element that was especially successful from a reach and impression standpoint in 2016 was our partnership with Tastemade. We were able to create over 20 videos and acquired over 26 million views across both our channels as well as theirs. We will look to build off of these successes and learnings as we begin to construct our digital plan for 2017. YouTube Marketing : As in previous years, paid advertising on YouTube supports our TV ads and long-form video. That focus will broaden to support all video content we produce in 2017, including the new TV ads and digital videos. We will repurpose Tastemade videos throughout the year to match the products/initiatives our National partners are messaging on their channels. YTD Paid YouTube 2016 (Through end of Dec.) Impressions Views Clicks CPCV 6,524,924 1,551,609 18,689 $0.04

4

Search Engine Marketing: Our goal in 2017 is to build off the strategy put in place last year – support the Return to Real campaign and overall content strategy by focusing on bringing more highly qualified traffic that will want to stay longer and engage more. We’ve optimized our search efforts to drive quality traffic rather than quantity. We will continue to measure bounce rate, pages per session and time on site, and we will continue to optimize. Additionally, we are focusing our efforts on appearing in more competitive search queries and improving our average position.

YTD Paid Search 2016 (Through End of Dec.) Impressions

Clicks 483,092

CTR 0.55%

Avg. Position

87,133,906

2.0

5

COMMUNICATIONS Presentation to Board of Directors

March 2017

Page Number

Public Relations Program

1

News Bureau

11

Industry Communications

15

News Releases

18

Public Relations Program

Communications Services Program

REPUTATION MANAGEMENT ______________________________________________________________________________ Importance  Tap real farmers to help share narrative about California dairy farming and meet consumer demand for food transparency  Keep dairy farmers, industry partners and CMAB staff up-to-date on news and trends impacting the dairy business  Align with industry stakeholders on issues messaging and process  Dairy Farmers Social Team CMAB mobilized a group of five socially active California dairy farmers to share the positive California dairy story on their social channels using the hashtag #CADairy. The group aims to address consumer concerns about animal welfare, sustainability and more. To help support the group and encourage active participation, CMAB shared weekly content recommendations, as well as hosted a check-in hour to provide individual feedback on social engagement, recommendations for increased engagement, and answer questions.

2

 Daily Monitoring & Social Listening CMAB monitored traditional and social media daily, tracking Real California Milk proactive coverage, dairy and food industry trends, and issues (food safety, environmental, animal care, drought, etc.). The team provided an analysis and POV on impacts pertaining to the California dairy industry, in addition to recommendations for amplifying positive stories on Real California Milk owned social channels.  California Dairy Communicators CMAB convened a meeting of the California Dairy Communicators group to exchange information and address issues that are/potentially impacting different industry groups. CMAB also developed a crisis response protocol for this group for the industry to have a unified voice and approach. CALIFORNIA & NATIONAL INITIATIVES ______________________________________________________________________________ Importance  Build awareness of and preference for the Real California Milk seal/product with the seal by sharing authentic dairy farm family legacy stories and dairy nutrition information backed by science  Leverage a trusted health advisor to counsel peers about the importance of dairy nutrition, utilizing new scientific research about whole milk and flavored milks  Share inventive holiday entertaining serving ideas using dairy foods – created by influencers – to drive awareness and purchase of products carrying the Real California Milk seal

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Dairy Nutrition Education for Families  Health Professional Newsletter: “Healthy Eating Guidance about Whole Fats and Flavored Milk” CMAB shared new scientific research about the benefits of whole milk dairy fats and flavored milks with 6,750 members of the National Association of Pediatric Nurse Practitioners (NAPNAP) via its e-newsletter. The article shared referenced information around disease prevention and overall diet quality when kids consume dairy foods.  Health Professional Presentation: “Setting Families Up for Nutrition Success” Nurse Barb Dehn spoke to more than 100 physicians and nurses about dairy nutrition during a symposium held in San Diego. Barb discussed new science based research around whole dairy fats on cardiovascular health, nutrient needs for overall family wellness, and a comparative analysis of dairy and non-dairy beverages.  Patient Focused Blog & Social Posts: “Student Athletes in Your Family” Nurse Barb Dehn shared scientific information about the importance of milk nutrients for young athletes and milk’s role as a sports recovery drink in the “Student Athletes in Your Family” blog post. Nurse Barb amplified blog content on her Twitter and Facebook pages.  Consumer Media Coverage: Healthy Holidays Registered Dietitian Patricia Bannan shared ideas for a protein-packed breakfast with dairy on FOXNEWS.com, while her Ricotta, Cranberry and Pear Mini Tarts recipe (created for CMAB) was featured on The Daily Meal. Additionally, Patricia posted recommendations on her social media channels to help followers enjoy a healthy holiday season by entertaining with dairy. Holidays with Real California Butter  Multi-Media News Release: “Holidays Made Easy” “Holidays Made Easy: 6 Food Gifts, Recipes and Pro Entertaining Tips Using Kitchen Staples California Butter, Cheese & Milk” offered consumers easy ways to incorporate Real California dairy foods in holiday gifts, recipes and festive décor. Content included ideas for a California Cheese wreath, Squash Butter, California Cheese Board and traditional Milk Jam.  Twitter/Pinterest Party: “Fill Your Home with Holiday Cheer” Holiday tips enticed 165 moms and other consumers to gather on social media to share ideas and recipes for a memorable season starring Real California butter and other dairy foods as a holiday staple. The event also provided an engagement opportunity between California dairy processors and consumers. More than 3,000 Tweets were logged, with over 50% engagement on each post, reaching 24.9 million impressions; #cadairyholidays was one of the Top 40 trending hashtags during this time period.  Food52 Video: Squash Butter

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Followers of Food52 saw a how-to video using Real California butter in a seasonal squash butter recipe. The video was posted to Food 52’s Instagram channel followed by 1.4 million consumers. Rose Parade CMAB executed several PR tactics to promote the “Legacy of Generations” float in advance of the Rose Parade. Note: the following covers activities through December 31; the Rose Parade itself and other events on Jan 1 and after will be included in the next board book  Media Outreach CMAB conducted proactive outreach to media, delivering key messages to drive meaningful impressions and encourage conversations around California dairy. Stories included: o Reveal of the Float Design : “Legacy of Generations” represented more than 1,300 hard-working California dairy farm families, consumers’ favorite dairy foods and 1.7 million California dairy cows; the float design was featured in publications including The Mercury News, Modesto Bee, Pasadena Now, NBC LA, Holstein World, Cheese Market News, and through distribution of the press release “Real California Milk Unveils 2017 Rose Parade Float as Celebration of Multi-Generational Dairy Farmers.” o Float Rider Announcement : To help tell the story of 200+ years of multi- generational success, CMAB shared the stories behind the 11 multi-generational dairy farm families who served as float riders. Their stories were shared in regional print, online and TV coverage, including CBS Fresno, Petaluma Argus- Courier, Our Valley Voice, Cheese Market News, as well as on a national level with the press release “Real California Milk Selects Multi-Generational Dairy Farm Families to Represent California Dairy's Legacy of Success at the 2017 Rose Parade.” o Amplification via Partnerships: Through its’ partnerships with the Tournament of Roses, California Cut Flower Commission and Fiesta Parade Floats, CMAB and the “Legacy of Generations” float were featured in traditional and social media coverage. Content included the California Grown flowers used to decorate Rose Parade floats and the California Grown Certification, press releases issued the organizations and social media posts seen by more than 80,000 followers.  Live Television Segments (Satellite Media Tour) Consumers in 24 U.S. markets gained a sneak peek at the "Legacy of Generations” float in live segments hosted by HGTV’s Paul James. Paul focused interview messaging on the multi-generational dairy farm families and natural décor materials that reflect sustainable on-farm practices.  Float Decoration

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o Decoration of the “Legacy of Generations” float took place from December 27- 31, 2016 at Fiesta Parade Floats. The decorating process allowed dairy producers to engage with other industry members from across California, along with hundreds of volunteers and guests who viewed the float. Float decorating periods also provided opportunistic media coverage that resulted in TV and print coverage, including KTLA , CBS Los Angeles , FOX 11, Pasadena Star News, Reporter Herald and San Gabriel Valley Tribune.

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FOODSERVICE CHANNEL INITIATIVES ______________________________________________________________________________ Importance  Position REAL California Dairy as the future—the choice of trend-forward, culinary innovators.  Maintain strong relationships with industry editors to gain the most editorial mentions in the trends that provide third-party credibility and increase brand reach and influence in the channel. REAL Makers Foodservice Advertising Campaign The REAL Makers digital advertising campaign launched across trade publications targeting commercial foodservice, reaching a broad range of restaurant purchasing authorities, with chefs as a bull’s-eye target. This first wave of digital advertising runs through January 2017 and is estimated to deliver 1,351,500 total impressions. In 2017, the campaign will evolve to expand across both digital and print to further raise awareness among foodservice decision-makers for California dairy, and support national sales efforts in the channel. The team began concept development for print, and produced the first print ad featuring Hen House to launch in Pizza Today in February 2017.

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Trade News Bureau The team continued to pitch to leading foodservice trade media, providing recipes, photography and menu trend information for publication. Three recipes were featured in Club & Resort Business and Restaurant Business , generating 226,000 impressions within the target chef and menu decision makers’ audience.

CMAB attended the 2016 International Foodservice Editors Conference (October 26-28, 2016). At the conference, the CMAB team met deskside with key editors in the foodservice segment to place photography, recipes, insights and interviews for the calendar year 2017. Meetings included:  Flavor & the Menu  National Culinary Review & Sizzle

 FoodService Director  Gold Medal Classroom  FSR Magazine

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Social Media In 2017 we will continue the “always on” approach introduced in 2016 and will have continual promotion of content throughout the year. Throughout the second half of 2016, we saw positive results and our social channels continue to be one of our most efficient ways of getting fans to interact with CMAB content. For 2016, to great success, we chose to focus more on engagement within the social channel vs clicking out to RCM.com. Engagement with our content has grown exponentially; across both Facebook and Instagram, 368,000 fans have reacted to our posts, 2,800 have left comments and almost 25,000 have shared a CMAB post to their own page or a friend’s page – this is just on our own channels. One of the highlights in 2016 was partnering with Tastemade for content development and distribution. We now have over 28 recipe videos and have achieved over 26 million views across our channels as well as theirs. Another highlight was the creation of our “Growing Up Dairy” videos. In both cases, we were able to take this content from our social channels and also integrate it into RCM.com, providing visitors new, fresh content. During the first half of 2017, we will be posting the remaining Tastemade assets as well as the remaining “Growing Up Dairy” content. We will also be repurposing some of the assets posted in 2016 to align with messaging used from our national partners. For instance, in January we were able to repurpose our Mango Avocado Smoothie Bowl, California Chocolate Chia Seed Pudding and California Overnight Oats videos and pair them with new copy supporting MilkPEP’s My Morning Protein campaign. We will also explore new opportunities to create content in 2017 that will continue to tell the Real Food story and establish a POV with our content that helps give greater meaning to the seal. We will also be exploring new digital media partnerships along the lines of Tastemade as we look to create and amplify new content.

Top-performing Growing Up Dairy post in 2016: Kaelyn Offinga  461,222 impressions  121,029 :10 views ($0.03 cost per view) o Industry benchmark: $.09 for :10  1,480 non-video engagements o 1,218 reactions o 168 shares o 94 comments

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Top-performing Tastemade post in 2016: Huevos Rancheros  2,252,420 impressions  458,852 :10 views ($0.01 CPV)  5,914 non-video engagements o 3,926 reactions o 1,640 shares o 348 comments

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News Bureau

Win with Healthy Snacking, Marginalize Margarine with Butter, Expand Ethnic Foods, Reframe the Dairy Health Story, Activate the Real California Milk Seal

Online News 25 Stories 85 M

Blog 2 Posts 40 K

• Positioned Real California butter and dairy products at the forefront of holiday entertaining • Leveraged human interest angle for Rose Parade float, bringing to life the successful legacy of California dairy families and the industry • Conveyed California dairy’s commitment to sustainable on-farm practices by sharing the story of float construction details • Health experts spoke to relevant peer and consumer interest around dairy nutrition • Events with the San Diego Chargers, San Francisco 49ers and Los Angeles Rams celebrated grant funding and furthered the California dairy industry’s commitment to youth health & wellness • Farm-to-School sharing event paired California educators and dairy farmers for a dialogue around dairy nutrition and farming practices

Consumer Coverage: 116.6 M

Coverage: 3 Press Releases

Social 3,162 Posts 28.3 M

Online News Social Posts 54.9 M

TV Segments 47 Segments 1.8 M

• Holiday activations featuring Real California butter and other dairy products drove the highest number of impressions • FUTP 60 Hometown Grants generated the second highest number of impressions • Activities leading up to the Rose Parade drove the highest quantity of news stories (note, coverage is until Dec 31, so the parade itself will be in next board book) • Paid tactics, such as a broadcast media tour and Twitter party, supported CMAB’s objectives and furthered visibility • Health education events and content provided peers and consumers with valued information about dairy health benefits backed by science

Reach: October – December 2016: 116.6 M

“With protein for power, calcium for strong bones, plus 7 other essential nutrients, dairy provides a perfect nutrient-dense package for all the athletes in your family.” – Nurse Barb Dehn Blog Post “It [the RCM float] is also educational, in that we city folk learn that the milk does not come from the store, it comes from hard work.” – Gayle Anderson, KTLA

PR activations promoted Real California Milk’s “Legacy of Generations” float in advance of the parade; tactics included 2 press releases, live TV interviews airing across the U.S, print stories, online coverage and social media posts on various channels

Behind-the-scenes TV segments revealed the inspiration of the float design, float rider stories and information about the materials used to decorate the float with a sustainability message

Total Reach: 46.8 M Impressions

Holiday entertaining with Real California butter and other dairy products provided content for a Multimedia News Release, Twitter/Pinterest party and coverage in consumer lifestyle outlets and social media

Nurse Barb Dehn and Registered Dietitian Patricia Bannan affirmed the benefits of real dairy to consumers via peer education, blog stories and social media posts

Total Reach: 58.6 M Impressions

Total Reach: 9.2 M Impressions

Reach: October 1 – December 31: 54.9 million

“The $20,000 will go to support LA’s Best health and fitness programs. We serve over 25,000 kids every day in 193 schools across the city of Los Angeles. One of the programs is dedicated to helping kids learn about making healthier choices.” - LA’s BEST President and CEO Eric Gurna, LA Rams News and Events

LA’s Best ‘Best Fit Initiative’ will benefit from $20,0000 in financial/in- kind resources, awarded at Johnny Hekker spoke to kids about the importance of healthy eating and shared his favorite foods, including yogurt and cheese Limerick Elementary School; Rams Punter San Diego Unified School District plans to purchase a “Rock the Bike”, a stationary bike with blender attached, through their $20,000 in grant funds; Chargers player Joshua Perry taught students how to make his favorite smoothie, which included milk and yogurt

Total Reach : 4.6M Impressions

Total Reach : 21.9M Impressions 100 6 th graders from Ascencion Solorsano Middle School in Gilroy refueled with milk after skills and drills

Total Reach : 28.3 M Impressions

Industry Communications

Producer Relations World Ag Expo, February 14-16, 2017, Tulare, CA

The CMAB hosted a booth at the 2017 World Ag Expo where Dairy Princesses handed out chocolate milk from Producer’s Dairy, Rosa Brothers Milk Company, Top Line Milk Company and Top O’ the Morn Farms, and promotional materials to attendees. Members of the CMAB Marketing Team also were on hand to answer producer questions and discuss current programs. We appreciate Board member participation in the booth to promote participation in CMAB programs, i.e. Dairy Princess, committee meetings, Fuel Up to Play 60, etc. Dairy Princess Program - 2017 Contest Dates District Application Deadline Contest Date Location District 1 Thursday, March 23 Friday, May 12 Fortuna District 3 Friday, March 3 Sat, April 8 Petaluma District 4 No contest held in 2017, coronation at July District Meeting District 5 Thursday, April 20 Weds, June 7 Manteca District 6 Friday, May 12 Thurs, June 15 Turlock District 7 Friday, April 14 Friday, June 30 Hanford District 8 Thursday, March 16 Friday, April 28 Fresno District 9 Thursday, April 20 Friday, June 9 Tulare District 10 No program scheduled for 2017-2018 year Dairy Princess Training Week is scheduled for Monday-Wednesday, July 10-12 in Turlock. The three-day training will provide the Dairy princesses with presentation and public speaking skills, as well as etiquette training, social media tips and an overview of industry issues. The CMAB staff provides publicity for all contests via press releases to local media and dairy producers about upcoming events and contest winners. Education and Community Relations 2017 Guidelines  Total ECR funding for 2017 is $36,000  Each board seat will be allotted $1,500 for product donations within his/her district; each board member will be responsible to keep track of approved funding; districts with multiple board seats may collaborate with other district board members to combine funds to support any projects.  Funds can be used for product donation ONLY for events in California  NOTE: Product donated to events CANNOT be resold for profit  Product donation requests sent to CMAB will be forwarded to the CMAB Board Member(s) in the district where the event takes place o Board members will be responsible for following up with the person sending the request for product donation

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o CMAB will not provide CMAB Board Member email or phone number to individual requesting product donation; the board member will need to follow up if interested in providing product donation for requested event  When a CMAB Board Member approves product donation request for an event, he/she must ensure the following: o product being purchased must carry the Real California Cheese or Milk seal o the event displays a sign/banner recognizing the product donation  artwork will be provided to each board member to share with approved events  When submitting invoices/receipts for reimbursement of donated product, the CMAB Board Members must provide a list of approved projects along with invoice/receipt. CMAB will provide a form to each board member. o Reimbursement to CMAB Board Members will be done twice a year – May and November. o CMAB Board Members should submit reimbursement for product donations by May 1 and/or November 6. Reimbursement will be processed within 7-10 days. o Reimbursement requests and completed project form must be returned to CMAB via email to promotions@cmab.net or eFax , 209.322.6466. District Meetings The 2017 Winter District Meeting Schedule: Each district followed a No-Host Reception at 6:00 pm and Dinner/Meeting at 7:00 pm except District 11, 5:30 pm Social and 6:30 pm Dinner/Meeting

District

Date

Venue/Address

4 5

Thursday, January 12 Tuesday, January 24 Thursday, January 26 Monday, January 30 Tuesday, January 31 Wednesday, February 1 Thursday, February 2 Tuesday, February 7 Tuesday, February 21 Thursday, February 23

Rolling Hills Casino

Papapavalo’s

10

Benji’s

7 9 8 6 1

Tachi Palace- Willow Room

Café 225

The Elbow Room

Branding Iron Ridgetop Café

11

The Mission Inn- Ho-O-Kan Room

3

Washoe House

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News Releases

Media Contacts: Jennifer Giambroni CMAB jgiambroni@cmab.net

(209) 690-8244 Alyson Barnes Ketchum alyson.barnes@ketchum.com (415) 984-6259 Statewide Effort to Increase Healthy Eating and Physical Activity Resources Awards $20,000 to LA’s BEST After School Enrichment Program LA’s BEST to receive financial and in-kind resources from California Dairy Families, Los Angeles Rams and the National Foundation on Fitness, Sports & Nutrition. LOS ANGELES (November 22, 2016) –LA’s BEST After School Enrichment Program, a partnership of the City of Los Angeles, the Los Angeles Unified School District’s Beyond the Bell Branch and the private sector is expanding student health and wellness with $20,000 in financial and in-kind resources from California dairy families, the Los Angeles Rams and the National Foundation on Fitness, Sports & Nutrition (NFFSN) through a special award celebrated November 17 th at Limerick Elementary School in Canoga Park. The $10,000 ‘Hometown Grant’ being awarded to LA’s BEST came from a partnership between California dairy families and the Los Angeles Rams through the Fuel Up to Play 60 (FUTP 60) program and was matched by the NFFSN in support of the Presidential Youth Fitness Program’s 60 th anniversary celebration. "LA’s BEST knows that keeping our kids healthy is a part of their overall well-being,” said Eric Gurna, President & CEO of LA’s BEST. “This is why, each year we provide the more than 25,000 students we serve with unique opportunities to learn about the importance of healthy eating and exercise. It is an honor to receive this grant through the FUTP 60 program, which will help students be more active, healthier and happier.” The ‘Hometown Grant,’ and match means students in the LA’s BEST program will join the 13 million students who are eating healthier, 16 million students who are being more active and

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